TaxTMI 
TaxTMI 
2015 (6) TMI 1281
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....ar, 2004-05, the assessee is aggrieved in confirming the addition of Rs. 37,01,714/- on account of expenses incurred by the assessee holding that such expenditure is not allowable u/s 37(1) of the Income Tax Act, 1961 (hereinafter the Act). For assessment year 2005-06, the Revenue is aggrieved in restricting the disallowance of personal expenses of A. R. Ruia Group and B.R. Ruia Group, amounting to Rs. 19,85,249/- to 10 % thereof without appreciating that the disallowance was made on the basis of clear evidence found in the seized material and categorized as personal expenses. 2. During hearing of these appeals, Shri Vijay Mehta, ld. counsel for the assessee, advanced his arguments, which are identical to the ground raised by f....
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....alance sheet along with tax audit report, filed on 28/11/2008. The case was selected for scrutiny, therefore, notices along with questionnaire was served upon the assessee. During assessment proceeding, the ld. Assessing Officer made disallowance of personal expenses of Directors amounting to Rs. 75,98,514/-. The stand of the assessee is that such expenses were incurred for the purposes of business of the assessee company during performance of their duties/responsibilities. It was also claimed that such expenses were wrongly termed as personal expenses as the same relates to performance of duties for business purposes of the assessee company. It was explained before us also that such expenses are like other employees of the assessee wh....
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....ent house which was used by the assessee company as guest house, wherein, business meetings/conferences were held, thus, such expenses are directly related to the business of the assessee company. The explanation of the assessee was discarded by the Assessing Officer merely on plea that such expenses were expended of personal purposes, whereas, we find that assessee itself categorized the expenses under the head business expenses and personal expenses. The expenses are like mobile bill payments, telephone expenses, travelling expenses, photo expenses, etc. It is also noted that before the ld. Commissioner of Income Tax (Appeals), certain expenses were explained to be relating to purchase of fixed asset like furniture and fixtures, air-condi....
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....ple, the expenses noted on these pages include telephone expenses, traveling expenses, photo expenses, etc. These expenses have been paid and accounted for by M/s PML. The expenses in the page no. 15 to 18 and page no. 33 show expenses incurred for refurbishing premises where "Mogra Shop" has to be relocated. Mogra Shop was running its business at a different place within the Phoenix Mills Compound. That place was required by PML for redevelopment. It is obligation of PML to have Mogra Shop to be relocated at alternate premise within the PML Compound. Therefore, PML had refurbish alternate premise for Mogra Shop to relocate it at that premise. The expenses noted in the page no. 26 to 28 are repetition of those noted in the page nos.&nb....
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....ner of Income Tax (Appeals) in disallowing the expenses to the extent of 10% and granting relief to the extent of 90%, out of Rs. 19,68,335/- (AY-2004-05) and Rs. 2,03,879/- (AY 2005- 06). Identical is the situation for the amount of Rs. 23,61,443/- (AY 2004-05) and Rs. 17,81,370/- (AY 2005- 06). 2.4. So far as, the amount of Rs. 14,22,571/- is concerned, which is in respect to expenses for Mogra shop, as discussed earlier, these expenses are allowable in full u/s 37(1) of the Act as the expenses were incurred for business purposes. So far as, the expenses with respect to penthouse amounting to Rs. 18,46,165/- (AY 2004-05) and Rs. 60,000/- (AY 2005-06) are concerned, keeping in view, the totality of fac....